French banking group Crédit Agricole, which notably owns Amundi, has unveiled its medium term strategic plan over the period 2016-2019, Strategic Ambition 2020.
The €7.7bn investment plan, of which €4.9bn will serve to develop the group’s business lines and to pursue its digital transformation, consists of four priorities.
It highlights Crédit Agricole’s large refocus on retail clients.
Crédit Agricole intends to simplify its capital structure and to roll out a new customer plan through digital transformation. It also seeks to strengthen its growth dynamics as well as its synergies in its core business lines and to sustainably improve its operational efficiency.
Crédit Agricole expects its asset management business to expand more in the retail segment and to speed up its growth in the institutional segment.
Targets set for Amundi include net retail inflows of €100bn including €40bn through joint ventures between 2016 and 2019.
On the retail asset management side, Crédit Agricole plans to “capture a higher share of inflows from partner networks by capitalising on market conditions and strengthening synergies with insurers” and to continue its expansion among third-party distributors, in France and abroad.
On the institutional side, some €60bn inflows are expected over the period excluding mandates of Crédit Agricole and Societe Generale. Net inflows should form around 4% of Amundi’s assets under management per annum between 2016 and 2019.
A 5% annual growth is targeted for Amundi’s net income CAGR between 2016 and 2019.
As for Amundi’s cost/income ratio, which was 52.4% in 2015, Crédit Agricole expects it to not exceed 55% in 2019.
Amundi will consider external acquisitions that offer major revenue enhancement and cost-savings opportunities, based on one or more of the following criteria:
- Strengthen Amundi’s management platform and broaden our scope of expertises and solutions (e.g.: Smith Breeden in the USA)
- Create new long-term distribution partnerships, based on obtaining control of an asset management company together with a distribution agreement with a network (e.g.: Bawag PSK Invest in Austria)
- Strengthen Amundi’s geographical presence either in countries offering Amundi the opportunity to gain new market shares or in high-growth markets, particularly in Europe and Asia (e.g.: KAF in Malaysia)
Crédit Agricole will also raise efforts in savings management and insurance businesses in order to accelerate their development. It has the ambition of becoming the No1 life insurer in France as well as a major player in group pension plans by doubling its market share in group pensions from 8% to 16% by 2019.
Other targets in the insurance segment include a growth of 10% in AUM from 2016 to 2019 and an expansion of the unit-linked contracts’share in savings/retirement insurance AuM by 5% to reach 25% by end 2019.
Regarding its wealth management business line, Crédit Agricole has set a target of €3bn average net inflows per annum over 2016-2019 for its subsidiary Indosuez Wealth Management, managing €110bn at end 2015.
Crédit Agricole has also unveiled objectives for Italy, its second largest market after France. The group wants to fast gain new customers and to continue to pool resources in order to reduce costs.